Monday, June 13, 2016

Monday's Agenda

My two prospects for the day -- EFA and EWG -- are Europe plays, subject to the uncertainties of the Brexit vote on June 23 that will determine whether the United Kingdom will remain part of the European union.

Uncertainty produces high volatility, and so it is with these two funds.

EFA is a wider play, with about half of its holding sin Europe and the rest in developed-world in other regions. EWG covers blue chip companies in Germany, continental Europe's most robust economy.

One possible problem with the two is wide bid/ask spreads on front-month at-the-money calls, my benchmark option for judging the spread.

EFA's bid/ask spread is 14.0%, and EWG's,  14.3%. I prefer single-digit spreads but I have on occasion allowed for higher.

Since this is an event play I would treat it like an earnings announcement, where I go in the last trading day before the event.

In this case that would be next week, on Wednesday June 22.

So I won't do a full analysis today but shall wait, making a note to put these two symbols on the Prospects list for June 22.

I plan no full analyses today and shall enter no new positions.

-- Tim Bovee, Portland, Oregon, June 13, 2016

Odds On: The Making of an Evidence-Based Investor
by Matt Hall


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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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